Pay 2% to protect a ‘loan’. Settle it for 1–2%? The contractor debt mystery deepens

When ContractorUK first examined Amanda’s case, one document stood out.

A company called Previse told her that £3,459.76 remained outstanding from her former IQ arrangement. It then offered something called “Loan Protection” for £69.20 plus VAT.

The arithmetic is exact: £69.20 is 2% of £3,459.76.

At first, the significance was conceptual. Our source questioned what kind of genuine loan could apparently be insured or indemnified against repayment for a tiny fraction of its face value.

But after reviewing another contractor’s historic documents, our source returned to Amanda’s paperwork and spotted the percentage. “In Amanda’s case I only noticed after we discussed it that this was for exactly 2% of the amount being claimed as outstanding, which may be significant.”

The source said the next question was what sat behind the Previse proposition: whether the protection was backed by the then-creditor or provided independently by a third party, and what happened legally to the underlying loan when a contractor bought the product.

Then another number appeared: 1–2%

While reviewing historic Felicitas material for ContractorUK, the same source recalled the discounted settlements reached with some former contractors in early 2020.

Felicitas itself - and similar companies- circulated offers at 5% of loan face value. But our source said: “Most settlements concluded at the time were for more like 1-2% of the loan face value.”

That does not establish any connection between Felicitas’s settlements and Previse’s earlier Loan Protection product. Nor does a discounted settlement prove that an underlying debt was worth only the amount accepted to settle it.

But the numerical overlap gives ContractorUK an obvious question to investigate: why does 2% appear around liabilities ostensibly worth 100% of their face value?

ContractorUK’s archives provide another clue

Historic forum posts suggest Amanda was not the only IQ contractor to encounter Previse in connection with old scheme records.

In May 2018, poster BankingContract0r, discussing historic IQ Contracts/IQ Consultants arrangements while trying to establish an outstanding loan balance, reported: “Previse are asking to look in archives.”

That does not tell us who instructed Previse or what legal or commercial role it was performing. But it does place Previse within the historic IQ loan-records picture described by another contractor.

Other contractors were also discussing percentage-of-loan propositions around the same period. In one CUK discussion, a poster described being offered a Deed of Release for 5% of the outstanding loan plus a £250 administration fee. The poster did not identify the company making that offer as Previse.

Another poster, Coresme2, described discovering that obtaining a Deed of Release would cost 5% of the outstanding loan, and characterised the proposition as having the “whiff of a scam”. That was the poster’s opinion, not ContractorUK’s conclusion.

What those accounts do establish is that contractors were encountering services whose price was calculated by reference to the face value of the alleged loan — rather than simply a fixed administration charge.

Was ‘Loan Protection’ really insurance?

The questions around Amanda’s Previse offer are therefore becoming more specific.

Was Previse genuinely taking on the financial risk that Amanda might one day have to repay £3,459.76 in exchange for £69.20 plus VAT? Was another party underwriting that risk? Was the then-creditor involved in the protection arrangement? Or did “Loan Protection” perform some other function by which a small percentage of the nominal balance could extinguish, indemnify or otherwise neutralise the larger liability?

At present, ContractorUK does not have evidence establishing that Previse and any creditor were connected, or that the 2% Loan Protection charge and later 1–2% settlements were part of the same arrangement. The similarity is a line of inquiry, not a conclusion.

But our source believes there is a straightforward way to test it: find contractors who actually bought Previse Loan Protection and examine the agreements and correspondence they received. “Ideally getting hold of any agreements signed and related correspondence with anyone who took up the offer would allow us to get under the hood,” the source said.

The documents ContractorUK now wants to see

ContractorUK would like to hear from former contractors who received a Previse Loan Protection offer — particularly anyone who paid for it. We want to establish the alleged loan balance, the price quoted for protection, whether that price was consistently calculated at 2%, what contractual protection was actually provided, who stood behind it and what subsequently happened to the underlying loan.

Those documents could answer the central question raised by Amanda’s paperwork: was the exact 2% figure simply the price of an independent protection product — or does it tell us something more fundamental about how the historic contractor loans themselves were being valued and administered?

If you have information you would like to share, please contact us at editor@contractoruk.com.